HOUSTON, April 21 /PRNewswire/ -- Baker Hughes Incorporated(NYSE: BHI; EBS) today announced that it has signed an agreement to sell its30% minority interest in WesternGeco, a seismic venture jointly owned withSchlumberger Limited, to Schlumberger for $2.4 billion in cash. The sale hasbeen approved by Baker Hughes' Board of Directors and is expected to becompleted by the end of April 2006. Baker Hughes expects to record a pre-taxgain of approximately $1.74 billion (approximately $1.05 billion, net of tax),subject to normal closing adjustments. Cash proceeds, net of tax, areexpected to be approximately $1.8 billion. Baker Hughes was advised byGoldman, Sachs & Co.
The company plans to use the net cash proceeds to repurchase stock;accordingly the company also announced that its Board of Directors hasincreased its stock repurchase authorization by $1.8 billion.
Commenting on the sale, Chad Deaton, Baker Hughes' chairman and chiefexecutive officer said, "We have been pleased with the results fromWesternGeco over the last several quarters and with the performance of theWesternGeco management team. However, the $2.4 billion sales price providesus with an excellent point to exit our minority ownership position. We remainexcited about the growth in the global market for our products and servicesthat we see continuing for the next several years. Baker Hughes will continueinvesting in people and technology to further our penetration of key globalmarkets, and we maintain our intention to return cash in excess of our needsto our stockholders through our stock repurchase program."
Conference Call
The company has scheduled a conference call to discuss this announcementas well as its first quarter 2006 earnings on Wednesday, April 26, 2006, at8:30 a.m. Eastern time, 7:30 a.m. Central time. To access the call, which isopen to the public, please contact the conference call operator at (800) 374-2469, or (706) 634-7270 for international callers, 20 minutes prior to thescheduled start time, and ask for the "Baker Hughes Conference Call." Areplay will be available through Wednesday, May 10, 2006. The number for thereplay is (706) 645-9291 and the access code is 6774291. The call and replaywill also be web cast on http://www.bakerhughes.com/investor .
Forward-Looking Statements
This news release (and oral statements made regarding the subjects of thisrelease) contain forward-looking statements within the meaning of Section 27Aof the Securities Act of 1933, as amended, and Section 21E of the SecuritiesExchange Act of 1934, as amended. The words "expects," "expected," and similarexpressions are intended to identify forward-looking statements. There aremany risks and uncertainties that could cause actual results to differmaterially from the preliminary estimates in our forward-looking statements.The company's expectations with regard to gains and cash proceeds net of taxare subject to the completion of the transaction, tax and accounting treatmentupon completion and the performance results of WesternGeco prior tocompletion. The risks and uncertainties regarding the completion of the saleof our interest in WesternGeco include, but are not limited to, failure of theparties to satisfy closing conditions. The company's expectations regardingstock repurchases are subject to market conditions, such as the trading pricefor the company's stock, and management's discretion to discontinue stockrepurchase at any time. These forward-looking-statements are also affected bythe risk factors described in the company's Annual Report on Form 10-K for theyear ended December 31, 2005, and those set forth from time to time in ourfilings with the Securities and Exchange Commission. The company assumes noobligation to update any of the information referenced in this news release.The documents are available through the company's web site or through theSEC's Electronic Data Gathering and Analysis Retrieval System (EDGAR) athttp://www.sec.gov .
Baker Hughes is a leading provider of drilling, formation evaluation,completion and production products and services to the worldwide oil and gasindustry.
NOT INTENDED FOR BENEFICIAL HOLDERS
Contact:
Gary R. Flaharty (713) 439-8039
H. Gene Shiels (713) 439-8822
SOURCE: Baker Hughes Incorporated
CONTACT: Gary R. Flaharty, +1-713-439-8039, or H. Gene Shiels,
+1-713-439-8822, both of Baker Hughes Incorporated
Web site: http://www.bakerhughes.com
http://www.bakerhughes.com/investor
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